The black magic of misleading and false advertisements is at its peak. According to the Advertising Standards Council of India (ASCI), 81% of advertisements examined in 2023-2024 were found to be misleading. According to the Cambridge Dictionary, an Advertisement is a notice that is published or broadcasted by an endorser or advertiser to attract consumers and provide information of public interest.
As per the Consumer Protection Act, 2019 (CPA, 2019) misleading advertisements are those that falsely describe a product or service, give false guarantees, mislead consumers about its nature, substance, quantity, or quality, deliberately conceal important information, convey an express or implied representation, which if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice. As per the Havells India Ltd & Anr v. Amritanshu Khaitan & Ors[1], The Delhi High Court reasoned that an advertisement is misleading if it misguides its targeted audience, and has the potential to influence consumer spending behaviour, or could harm its opponents. This blog aims to shed light on the ever-evolving subject matter of Misleading Advertisements and the Laws in India. Furthermore, it elucidates the duties and liabilities of endorsers and advertisers along with the kinds of misleading advertisements.
What turns an Advertisement into a Misleading Advertisement?
The influence of advertisements on consumer behaviour and spending habits can’t be ignored. Advertisements must be truthful and fair. Misleading advertisements are an ethical dilemma in the current globalized era. They severely affect consumer choice and violate basic consumer rights, such as the right to information, the right to choice, and the right to be protected against unsafe goods and services, as well as unfair trade practices. Sometimes, the product’s virtues may be overstated, and when these claims exceed a reasonable limit, intentionally misrepresenting the key facts, it becomes objectionable.
In the case of Tata Motors Ltd. vs Pradipta Kundu & Anr[2], The plaintiff claimed that a deceptive and false advertisement was issued by Tata Motors regarding the mileage of the car. After certain tests and inspections, The mileage turned out to be less than what was claimed by the company. Hence the company was held liable under the Consumer Protection Act, of 2019, and was made to pay the monetary damages.
Forms of Deceptive Advertisements
Comparative advertising
Comparative advertising is a marketing tactic where a company showcases its products as superior in every aspect when compared to its competitor’s product. Comparative advertising is a juggle of words to compare directly or indirectly the products and services of the competitors and to call them out as inferior. In the case of Dabur India Ltd. v/s. Colgate Palmolive India Limited[3], the defendant broadcasted an advertisement on the visual media where the defendant prevented the consumers from buying a product similar to that of the plaintiff. By denigrating the plaintiffs’ goods, the defendant was held liable by the court.
Surrogate Advertisement
It is a marketing tactic used to endorse products, services, and goods which are not legally entitled to be broadcasted or advertised and are prohibited or restricted by law. This term refers to the practice of promotion of goods through advertisements by companies that claim to represent other goods or services.
Puffery Advertisements
These are exaggerated, boastful, and subjective claims by companies to bait customers into making purchases. The statements are subjective and cannot be proven or disproven. It entails a certain level of braggadocio and boasting that no reasonable person would believe. However, puffery advertisements are legal, unlike false and misleading claims that are devoid of truth and veracity. Puffery claims are generally considered to be opinions rather than factual statements while on the other hand, misleading claims are deceptive statements.
In the case of Benjamin Careathers, David Wolf, and Miguel Almarez v. Red Bull[4], the defendant was alleged for its advertising claims in which the plaintiff accused Red Bull of misleading claims for its energy drinks as they improved endurance and reaction time, baiting consumers into paying a premium, while the claims were deemed deceptive and unsubstantial by science.
Framework for Addressing Misleading Advertising Practices
There are various Laws and Regulations in India that prevent false and deceptive advertisements. These have been enacted to protect consumers from various forms of exploitation and to prevent the violation of the basic rights of the customers. The primary issue lies in the effective implementation of these Acts, resulting in minimal or no action being taken. The legal framework addressing misleading advertisements in India is established under the Consumer Protection Act (CPA) of 2019.
Section 89 of the Act specifies that any manufacturer or service provider who issues, publishes, or broadcasts a false or misleading advertisement that is prejudicial to the interest of consumers and the public at large shall be punished with imprisonment for a term that may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees.
Other laws regarding the misleading advertisements are:
- Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
- Food Safety and Standards Act, 2006
- Drugs and Cosmetics Act, 1940
- Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003
The Patanjali Case: “Misleading Marketing and its Impact on Consumer Rights”
Despite having various frameworks regarding misleading advertisements, the issue is at its peak and gained more prominence after the recent case of Patanjali.[5]. The issues in this case revolve around the Law of Consumer Protection and businesses’ ethical responsibilities regarding advertising.
In this case, a plea was filed by the Indian Medical Association (IMA) which alleged Patanjali for unsubstantial claims for their products and campaigns against Covid Vaccination operations and modern medicines.
To protect the consumers from such type of misleading claims is the main target because “Consumer welfare is the ultimate measure of a market’s fairness, as it reflects the genuine value delivered to those who engage with it.”[6]
The Supreme Court in this case issued some paramount findings such as the submission of a self-declaration form assuring that ads comply with the existing laws before issuing or broadcasting them. Development of complaint procedures for consumers to avoid being endorsed harmful information. These findings also mark celebrities and influencers liable for endorsing the wrong products and The Ministry of Consumer Affairs, Food, and Public Distribution has been directed to submit a new affidavit detailing the actions taken by the Central Consumer Protection Authority (CCPA) regarding false or misleading advertisements, in the food and health sector. These findings and directions of the court seem to be a step forward to curb this predicament of consumers in this ever-evolving world of advertisements and this case proves to be a helping hand in creating awareness of this indispensable issue.
“From Glitz to Grit: Legal Responsibilities of Endorsers and Advertisers in Today’s Market”
Influential figures in India have always received abundant admiration and enthusiastic displays of affection from the Indian fan community which enabled them to influence their devotees but it’s high time, as the recent judgments and findings of courts act as an awakening call for the Endorsers (usually celebrities and influencers), Manufacturers and Advertisers to take note of their liabilities and don’t go unaware in search of fame and money. Section 21 of the CPA grants the Central Consumer Protection Authority (CCPA) the authority to issue directives and impose penalties on deceptive and misleading advertisements.
To absolve them from liability, Endorsers and Advertisers must make sure that their content and claims are non-deceptive, truthful, and supported by credible pieces of evidence. It is their duty to present their advertisements and endorsements in such a manner that creates a positive outlook and not false impressions or misleading statements that they cannot verify.
In Sonu Nigam v. Amrik Singh[7], the Bombay High Court ordered singer Mika Singh to pay INR 10 Lakhs in damages for infringing the personality rights of other singers by using disproportionate promotional banners without permission, overshadowing Sonu Nigam.
Conclusion
The debate around misleading advertisements has set the bar high in recent days due to its evolving nature and effect of digitization followed by the Patanjali case and become a significant concern in India realizing the need for a stringent framework to protect consumers. Current legal framework includes the Consumer Protection Act, of 2019, and the Advertising Standards Council of India (ASCI) code, prescribing guidelines for ethical advertising practices.
From the above analysis the term ‘misleading advertisement’ can be defined as the one which contains wrong information, false claims and attempts to befool the customer regarding the product.
These ads in various forms have a harmful influence on consumers and more harshly on children.
Importantly, The blog offers insights for endorsers and advertisers who are in the business of generating profits and will now face legal liabilities for promoting misleading ads. Because “All that glitters is not gold”. They are accountable for ensuring the authenticity of claims made in advertisements they endorse because It can be stated that they are fully aware of these unethical practices.
[1] Havells India Ltd & Anr vs Amritanshu Khaitan & Ors 2015 (62) PTC 64
[2] Tata Motors Ltd. V. Pradipta Kundu & Anr 2020 (1) CPR 723
[3] Dabur India Ltd. V. Colgate Palmolive India Limited 2004 (29) PTC 401
[4]Benjamin Careathers, David Wolf, and Miguel Almarez v. Red Bull 2015 U.S. Dist. LEXIS 97533
[5] Indian Medical Association vs Union of India, W.P.(C) No. 645/2022
[6] Sen, Amartya, Development as Freedom, Oxford University Press, 1999
[7] Sonu Nigam v. Amrik Singh & Anr. Suit No. 372 of 2013
[i] 1. India Code, THE CONSUMER PROTECTION ACT, 2019, https://www.indiacode.nic.in, (last visited Nov. 8, 2024)
2. Pragati Khandekar, MISLEADING ADVERTISEMENT AND THE LAW IN INDIA, The Advocated League Blog View, (Nov. 9, 2024, 7:15 PM), https://theadvocatesleague.in
3. Pushpa Girimaji, Consumer Education Monograph Series-2 (Revised ed. 2013)
4. Ministry of Consumer Affairs, https://www.mca.gov.in/ (last visited Nov. 8, 2024)
5. Consumer Protection Act, 2019, § 89, Acts of Parliament, 1949 (India)
6. Apoorva, Patanjali Misleading Ads Case: Celebrities & Social Media Influencers Are Equally Liable for Endorsing Misleading Ads, Supreme Court, S.C.C. ONLINE (Nov. 10, 2024), https://www.scconline.com
7. Trupti Panigrahi, Imposing Liabilities on Persons of Influence: An Urgent Step Towards Public Policy Measures in India, 9 Int’l J. on Consumer L. & Prac. 2020 (Jan.-Dec. 1, 2020), https://ssrn.com
8. https://resmilitaris.net
Author: This blog is authored by Satikshan Gupta and Mr. Yash Gupta, students at NLU Sonepat.
